Skip to Content
0
Former Member
Jan 05, 2011 at 05:22 PM

F-1 Holders Exempt From Certain Taxes

361 Views

I have an employee that is a F-1 holder. We just discovered that no Federal taxes have been withheld for this employee. We should have been deducting Federal taxes. Also, we discovered Social Security (FICA) and Medicare taxes are being withheld. This employee is exempt from paying Social Security and Medicare taxes due to the F-1 status. This employee's DOH is 10/01/2010.

I have ran the last pay period of 2010. I did a test run of this employee's W2 and it is incorrect. In box 3 the Social Security Wages are pulling in. In box 4 the Social Security tax withheld amount is pulling in. Of course both boxes should be 0 because of the employee's status. Box 2 is blank because no federal taxes have been withheld and it should be.

What is the appropriate measure to take to correct this? I am thinking I need to somehow refund the Social Security and Medicare tax amount that has been withheld. But what about the federal that has not been withheld? How is that handled? Also, I will be going in on IT 0235 and exempt this employee from Social Security and Medicare taxes.

Is this correct?